100X.VC, a SEBI-registered investment adviser and category 1 alternative investment fund backs early-stage start-ups through the India Simple Agreement For Future Equity (iSAFE). The fund invests in batches of 10-11 start-ups and has so far funded 11 batches. 

Ninad Karpe, Founder and Partner, 100X VC, spoke with businessline about the fund’s investment approach, the early-stage start-up ecosystem in India, and more. Edited excerpts from the interview:


Could you give us an overview of the fund?

We invest on a cohort basis, which we call ‘class’; we invest as first institutional cheque writers. Our investments are made in instruments called iSafe — an Indianised version of safe notes. The firm is sector-agnostic and has invested ₹107.5 crore across 150 start-ups since inception in 2019. Typically, we invest in start-ups where dilution does not exceed 2-4 per cent. Although we have multiple parameters to assess a start-up, we predominantly assess the ability of the founder and the potential market size for the idea. 


What is your view on the current early-stage start-up ecosystem in India?

In the early stage, fortunately, we are still seeing a lot of deal flow; it hasn’t reduced but is, rather, increasing every year. That’s also a function of the number of people from colleges and schools who are interested in start-ups. In terms of sectors, we think there is potential in agri-tech and deep-tech. The ever popular sectors such as fintech, health tech, SaaS [software as a service] and D2C [direct to consumer] continue to thrive, and we are getting a lot of pitches in these areas.


Given that fund houses of all sizes are increasingly entering the early-stage investment space, what is the VC rationale behind the early bets?

These are low-investment, high-risk, and potentially high-return bets; everyone with this appetite is coming to early stage. Our message to them is: ‘Join the party’. The big fund houses are entering this space because they realise the need to spot opportunities early on, before it’s too late. 


What are the plans and roadmap for the fund?

We are aiming to invest in 100 start-ups this year. It is a pretty tall target, not due to lack of deal flow but the process of mentoring them. However, we are confident. Our target is also to cover as many sectors as possible, so we can mitigate risk. We want to increase the share of under-represented sectors in our portfolio, such as agri-tech and deep-tech.